Sundar Pichai warns that a potential AI bubble could impact every tech company, including Google itself

Sundar Pichai

Google’s parent company Alphabet says no tech firm — including itself — would escape the impact if the booming AI market suddenly crashes. In an exclusive interview with BBC News, CEO Sundar Pichai admitted that while the current wave of AI investment is exciting, parts of it are starting to look “irrational.”

Pichai described the moment as extraordinary but cautioned that the rapid rise in valuations and massive spending around artificial intelligence is raising familiar questions in Silicon Valley. Over the past few months, investors have poured billions into AI startups, chipmakers, and cloud providers. As a result, stock prices have soared, and some analysts are beginning to worry that the industry might be drifting into bubble territory.

Asked whether Alphabet would be safe if the AI bubble burst, Pichai didn’t sugarcoat his view. “I think no company is going to be immune, including us,” he said, adding that investment cycles in technology often swing too far in both directions.

The interview took place at Google’s headquarters in California, where Pichai also spoke about the rising energy demands of AI, delays in climate targets, investment plans for the UK, the accuracy of Google’s AI models, and how automation will reshape jobs. The conversation comes at a time when scrutiny of the AI market is at an all-time high.

Alphabet’s own performance shows how intense the AI race has become. Its market value has doubled in just seven months, hitting $3.5 trillion as investors grow more confident in Google’s ability to stay ahead of OpenAI. Much of that optimism comes from Google’s push into AI-focused superchips — a direct challenge to Nvidia, which recently became the world’s first $5 trillion company.

But not everyone is convinced the sky-high expectations are sustainable. Analysts have raised eyebrows at the $1.4 trillion worth of deals tied to OpenAI, especially since the company’s revenue remains tiny in comparison. The situation has drawn comparisons to the dot-com era, when investment raced ahead of reality and eventually led to a major crash.

Still, Pichai believes the underlying technology is real and transformative. Just as the internet survived its early bubble, he expects AI to follow a similar path. And he says Google’s advantage — owning everything from its own chips to YouTube data to its most advanced AI models — puts it in a stronger position to handle whatever comes next.`